Last in a too long series of columns on what’s wrong with IBM.
Enough horror stories, already! How do we just fix IBM?
Well it can’t be done from the inside so it has to be done from the outside. And the only outside power scary enough to get through the self-satisfied skulls of IBM top management is IBM customers. A huge threat to revenue is the only way to move IBM in the proper direction. But a big enough such threat will not only get a swift and positive reaction from Big Blue, it will makes things ultimately much better for customers, too.
So here is exactly what to do, down to the letter. Print this out, if necessary, give it to your CEO or CIO and have them hand it personally to your IBM account rep. Give the IBM rep one business day to complete the work. They will fail. Then go ballistic, open up a can of whoop-ass, and point out that these requirements are all covered by your Service Level Agreement. Cancel the contract if you feel inclined.
If enough CIO’s ask for it, this action will send immediate shock waves throughout IBM. Once IBM’s customers find out how long it takes to get this information and they see what they get, then things will get really interesting.
But don’t limit this test just to IBM. Give it to any IT service vendor. See how yours stacks up.
Ask your IT outsourcing provider to produce the following:
1) A list of all your servers under their support. That list should include:
- Make
- Model
- Serial Number
- Purchase Date
- Original and current asset value
- Processor type and speed
- Memory
- Disk Storage
- Hostname
- IP address(s)
- Operating system(s)
- Software product(s)
- Business Application(s)
Is this list complete? How long did it take your provider to produce the list? Did they have all this information readily accessible and in one place?
2) A report on the backup for your servers for the last 2 weeks.
- Are all servers being backed up?
- Are all the backups running in the planned time window? Is there ample time left over, or is the operation using every minute of the backup window?
- When backup runs on a server there are always files that are open or locked and the backup cannot copy them. Every day the backup team needs to look at their reports and make sure that files that were missed are backed up. In your examination of the backup reports you should see evidence of this being done.
- If you spot any potential problems with a server ask for a list of all the files on the server. The list should show the filenames, date’s, and if the archive (backup) bit has been flipped
Is this list complete? How long did it take your provider to produce the report? How often does your provider conduct a data recovery test? If a file is accidentally deleted, how long does it take your provide to recover it? Can your provider perform a “bare metal” restoration? (bare metal is the recovery of everything, the operating system included onto a blank system)
3) A report on the antivirus software on your Windows servers.
- Is antivirus software running on all your Windows servers?
- Is it the same (standard) version?
- Are the virus signature file(s) current?
- Ask for case information on any recent virus infections.
Is this list complete? How long did it take your provider to produce the report? When a virus is detected on a server, how is the alert communicated to your IT provider? How fast do they log the event and act on it?
4) A report on your network. It should include:
- Illustrations of the major network equipment including routers, switches, firewalls, etc.
- IP address allocations.
- Internal DNS entries.
- Current routing and firewall rules.
Is this information complete and current? How long did it take your provider to produce this information? Is this information stored in a readily accessible place so that anyone from your IT provider can use it to diagnose problems?
5) Information on your Disaster Recovery plans Here is what you want to know:
- Documentation on a recent DR test, the plan and results. It should show the actual times tasks were started and completed. Problems should be logged. (it is okay for there to be some problems, that is the purpose of the test)
- Ask for a list of names from the IT provider of the people who worked on the test.
- How many people who worked on the test live full time in the same country as your DR facility?
- Did your IT provider fly in an army of offshore support folks for the test?
- If there was a real disaster how long would it take your IT provider to assemble a team to support your emergency?
- Ask for a list of your critical applications to be provided and supported in a disaster.
- Is the list complete and correct? Is there sufficiently detailed information on each critical application? How much data is involved? Is the data actively sync’d over a network? How often is the sync’ing process checked? What hostnames and filesystems need to be restored? What application skills are needed to start up the applications?
6) Help desk information. Here is what you want to know:
- Ask for a report of all the help desk tickets for the last 2 weeks.
- Independently ask your company (not your IT provider) for information on known IT problems over the last two weeks.
- Compare the information from the helpdesk and your company sources.
- Pick a few random incidents from the help desk ticket report. How long did it take to discover the problem? How long did it take your IT provider to begin to work on the problem? How long did it take your IT provider to fix the problem? Was the problem really fixed?
- Is there an active problem prevention program? Is your IT provider examining the reported IT problems and finding ways to reduce the number and frequency of problems?
How long did it take your provider to produce this report? Did they have all the help desk ticket information readily accessible to everyone and in one place?
7) Look for evidence of continuous improvement.
- Repeat this process once a month.
- Look for changes and improvements month to month and over several months.
- Are the total number of problems being reduced?
- Is the response time to fix problems being improved?
- Is there clear evidence your IT provider has an active and effective continuous improvement program.
A good IT provider will have the tools to automatically collect this data and will have reports like these readily available. It should be very easy and quick for a good IT provider to produce this information.
A key thing to observe is how much time and effort does it take your IT provider to produce this information. If they can’t produce it quickly, then they don’t have it. If they don’t have it they can’t be using it to support you. This then will lead you to the most important question: are they doing the work you are paying them for?
If I were a CTO/CIO and IBM couldn’t produce the info above in a couple of hours, I’d be really really really concerned. In a well-run shop, all it’d take is printing out some routine (and automated) reports.
I’d be curious to see if any CTO will listen to the above recommendations and put IBM to the test.
They will have difficulties with these requests. It will take weeks if ever for some of them.
Too bad they are blocking these articles where they can. Have to use cell phone to read.
Well folks, looks like the end of Western civilization is getting closer every day. I wonder who will be looking back in history and laughing at our follies a century or two from now.
Too drastic you say? Perhaps, perhaps not. Sure am glad that my mother and brother have passed on to their reward and won’t have to suffer through the Great Collapse. Sure am glad I don’t have any offspring to worry about. (None that speak English, anyway.)
Gee, I heard about a “Great Collapse” in 1999 too. Didn’t happen.
I think T. S. Eliot’s comment about ending with a whimper, not a bang is the more likely outcome.
I’m sure Bob is not on the IBM exec invite-to-dinner list now. IBM is too big to die swiftly and the denial reaction will be swift and sure.
I agree with Bob’s idea to check on your IT vendor, but that does require due diligence aka work on the customer’s part. Many large organizations have taken the easy path of trusting a big name brand. I don’t see that changing.
All this says something about us. Why do we listen to execs who tell us everything will be okay then fire us? The same reason we listen to politicians who tell us we don’t have to raise taxes or cut programs to keep our economy intact.
Ultimately we’re listening too much to what we want to hear. Eventually reality rears its ugly head and when it does, it is ugly.
Wasn’t the world supposed to end last year or something? Rapture?
I think it’s supposed to be this year.
Last year it was the Rapture.
This year it is the Mayans (or whatever they saw coming that meant they didn’t need to continue their calendar).
Next year it will be the Earth’s magnetic poles switching.
The end of the world comes along very reliably every year.
Mayans!
I don’t work in IBM’s Outsourcing division, but I occasionally do work for them. They cannot even provide most of this info to other bits of IBM in a timely manner, let alone to customers. Section 1, OK, yes, they have that stuff on file and can get at it quick. Sections 2, 3 and 5? No way…
IBM can not produce a server list with everything together. It is not uncommon for them to have 3 or 4 independent lists and none of them line up. If they provide your CIO/CTO a list, it would probably be the first time they compiled it.
The internal systems are just as bad. Same info in 3 – 4 different places that don’t talk to each other. Data even manages to go bad when I’ve changed nothing. One would think that a company that’s blowing it’s horn about Smart this, Smart that, Big data, ect would be able manage an inventory of machines…. The spread sheet I have on my computer is my source of record. Working harder, not smarter…..
I’ve been working at IBM in GTS for 2 decades. IBM can’t even provide to ME, an architectural diagram of the individual customer solutions. I can’t tell you how many times my manager asked me to handle an unfamiliar account during a sev 1 call. This is the first thing I ask for on all the accounts. When I ask the DPE/PE/SDM for an “Architectural diagram”. I usually get a confused look and then they ask ‘what do you mean”? Once I explain it to them, they just say ‘no, we don’t have anything like that’. HOW THE HECK can this company solution all these complicated customer environments, then forget to document what was done! Oh wait. I know, after each environment is solutioned and built out, IBM RAs the people involved on the account.
Dear Miss,
I spent over three decades with The Company, bleeding blue for about two-thirds of that time. I saw it move from a company where I could make a few calls and sit down with maybe 10 folks and get a complete end-to-end process and technology picture of an IBM enterprise process OR a customer enterprise process to a company where most people don’t know what goes on outside their cube. IBM simply stopped valuing people who could understand those things. So, I heartily agree with your assessment. I wish it were otherwise.
Bob, I’ve been reading your articles for over 2 decades and I’ve got to say that these IBM articles have caused me to lose a good bit in faith to you. The first three articles were sensationalism with nothing to support extreme accusations. Do you think that declaring IBM is going to reduce their workforce by 70+% might effect some IBMers who are reading the article? Irresponsible. In this article you demand IBM be able to provide something that most companies couldn’t provide *internally* within a day. I’ve worked across accounts nationwide since 1991 and the number of companies who could is probably less than 10. To expect IBM or any other vendor to be able to do it is ridiculous. This is the main difference between people in the ivory tower and those in the trenches. I’m not saying that vendors, including IBM, do everything they should be doing, but let’s be reasonable! Really, I’ve come to expect more from you. These articles have all been too extreme. You’ve put the cringe in Cringely!
Yet other commenters in the service business have said that that information should already be available and kept up to date. What else would justify ongoing “service” charges?
Bob, You hit the nail on the head! Customers should demand to perform their own spot audit of deliverable’s and compliance to their contract. Do not rely on what IBM provides. Customers should ask Who has access to their data? Where are these people? Customers should request copies of IBM’s own Security And Risk Management audits.
Business Recovery Services ‘BRS’ is a farce. Equipment available, qualified personnel on site? My team once received an substantial award for signing on a customer for lying to them about that.
Several years ago a customer once said to me having heard it at a trade show. IGS, you can always buy better but you will never pay more.
I can tell you IBM has some major multi-million dollar Business Continuity recovery contracts in place which employ their “Rapid Recovery” premium service that call for a 4 hour SLA to hot swich a customer’s business if the customer declares. What a joke! In many cases they don’t even have the necessary equipment in place. Not to mention that they have RA’s hundreds of their DR folks who were intimate with the customer’s recovery process. If one of these customer’s ever declare, say so long to their business. Thank you very much International Business Machines.
Bob, you are a genius and I revel in your ideas.
The running of data centers is only ONE aspect of IBM’s business interests. Even assuming all the above is true it’s not going to bring the company down, nor will ‘fixing’ it fix the company.
The thing is, if any company hires an another one to look after it’s IT infrastructure (or any aspect of it’s business), it has to accept that the hired company does not have the same vested interest in keeping things up and running as the hiring company does.
And when the service provider is a big as IBM?. Well, if you lose one contract there’s always plenty more to keep you humming along, and all the other stuff as well.
I think you are being too simple in your analysis of the issues and your solutions. Are you entering politics by any chance because this seems to be the sort of overly simplistic arguments and solutions the politicians come up with to make their case.
Sure, there’s a lot wrong at IBM but when you look at the EPS etc the business is a success. You could say it’s short term, can’t last etc but IBM is just playing the wall street game. WS works on quarterly cycles so that’s the game IBM has to play. Why not blame all the big investing companies and stock exchanges for forcing IBM to play a game that forces it to work the way it does currently.
This is far bigger issue than just one company being broken. Could IBM be run better internally? Sure it could and that ‘might’ help the bottom line. I suspect doing so would certainly help ensure the company makes it to a 200 year celebration (having just had a 100 year one) but right now, I suspect IBM is happy if it makes it through each quarter. Maybe if Wall Street (and all the investors, you know, like YOU and ME as well as the investment companies) stopped thinking short term (like every quarter or less) it would let IBM think beyond that too. As it is, that are playing the same game as everyone else and that’s mostly about short term profits and stock value, not about quality products and services so they do whatever they need to do to make that happen. I am sure they are no different than a lot of other large companies in that respect.
I would agree with some of your points regarding IBM’s performance, but qualify them with the statement that just because IBM stock is going through the roof, doesn’t make them good corporate citizens or even a good place to work for the average Joe.
That said, there is a tidbit in your comments that echoes my long-standing sentiment and it bears netting out just a bit further. You mentioned that any time you put your IT in the hands of a third party, that party does not have the same vested interest in keeping things running. That, sir (or ma’am), is the nugget in all this dialogue. Once you hire outside support, you immediately have opposing goals. Your goal as the core business is to get as much support as you can for the least amount of money while your IT provider’s goal is to provide the least amount of support they can get by with in order to maximize profit. This difference makes any outsourcing agreement inherently dangerous. In large companies that outsource IT, you have two groups, each trying to make their respective execs and stockholders happy and at the end of the day. In my opinion, the most successful IT shops are internal. Even though most companies treat IT as a cost center and a necessary evil, if your paychecks all have the same name at the top, you’re usually all rowing the boat the same direction.
Good point: there’s a lot of money in things other than running operations. IBM implements software, writes apps, does conversions and a thousand other things that fall under project management and software services. The offered solution won’t matter much there.
A similar list of obvious questions for customers in these development arrangements might be equally alarming for the IBM account execs: Name the contractors assigned to my contract and the hours they’ve billed to me (and in total!) by week since the start of my contract. Please offer a sketch of relevant experience or skills that led to them being assigned to my project. Those two alone would be hard enough to answer for any project being completed off site.
Maybe it’s the baby boomer’s? They’ll be needing their retirement and they need to pull funds out of the market to do so. I can’t imagine you could switch such a huge input into output without big consequences.
Ah yes but when I left IBM I sold all my IBM stock and bought Apple and Google…..talk to me about the Wall Street game..I’ve done REALLY WELL, BETTER THAN with IBM stock…….IBM isn’t even close……….Mr. Cringely if only they will listen to you!!
I work for a similar organization in canada. The paralells are identical from all three articles. So what companies are NOT doing what is described in these articles and how do we work for those companies or as a customer make those companies more successful? Lets stop trying to fix IBM and make others so much more successful that these companies will have to change.
Any suggestions ? Any list of companies as goiod examples ?
You should look into it. If you start your own company they’d be your competitors.
I’ve worked in IBM Services for years and the real sad part is that if you passed this list of questions/requirements to a Sales Rep or an Account lead, they would struggle with the meaning of many of the terms. To actually gather the information would require a small act of congress not to mention a multiple-group fire drill. Eventually a report could be produced but it surely wouldn’t be in one day and it most likely wouldn’t be accurate. And all of this is because IBM management wouldn’t view this as an exercise which provides shareholder value. End of story.
Realistically, the Cringely request would take several days, if not weeks, to answer. If they are not already part of the Service Level Agreement (SLA), then there would be a lot of negotiation between IBM’s project or account execs and the customer.
While most people would rationally expect this sort of thing to be part of a managed IT service, the provision of these kinds of reports ON DEMAND is something IBM would not be ready to handle unless it were explicitly written into the Service Level Agreement. If such reports are part of the SLA, that’s great.
In all likelihood, this would be considered a “special project”, requiring explicit funding and and a dedicated project manager. It would require the coordination of people from many different departments, some US-based and some offshore. All of these people operate within their own timezones, so instant timing is probably not possible.
You cry “this is a critical situation…the customer is demanding this info!” So what? Your typical system or network administrator inside IBM may handle 5, 10 or more different customers at the same time. If you want someone to set aside some time to put together the reports, then that’s great…who’s going to PAY for it? Let’s set up some more meetings to discuss that part.
“Provide this info or we’ll cancel the contract!” It’s regrettable that the customer wants to cancel the IBM relationship. Just be sure to pay those millions of dollars IMMEDIATELY, per the contract terms labeled “premature exit clause”.
Agreed: if this type of reporting isn’t in the contract it isn’t being done, and demanding immediate responses to silly questions won’t end well unless the inquiry is in the context of a “Do it or we’ll drop” situation. And even then, as pointed out, IBM *did* put language in the contract for that situation. Now, you could do it in the context of a “preparing for renewal” exercise, and the acct exec will jump a little higher. But if you’re in year three of six you won’t get far.
This comes under the heading of “Be sure to write a good contract”, but folks have been avoiding work for thousands of years and they’re pretty good at it. It’s difficult.
There might be some left that are working hard, but none working smart.
I think one guy in brazil does everything. The rest just route and approve.
Even if in the sla, don’t get ur hopes up. SLAs are for lawyers.
On demand. There is always another sucker out there
If my group in IBM Services received this request, the crap would hit the fan. Management would be running around like chickens with their heads cut off trying to pull the information together. My manager would threaten the team with his “it’s a condition of employment” line that it needs to be completed in the requested time frame, no matter how ridiculous it was. He was one of the most unethical people I’ve ever dealt with. I am so glad I am no longer with that organization
The reports would get done, but it would be useless as it would not be accurate or complete..
Hi,
you mention in your article that a “Good” IT service provide should be able to provide all this detail – I’ve been working in this industry for 20 years and have worked with many of the major outsourcing providrs – IBM , HP, Wipro, Infosys, Cap Gemini, HCL and ive not come across a single provider that maintains a CMDb, even when its in the contract – or that would be capable of collecting all this information without causing an outage, or that does anything proactive at all.
can you please let me know who the good providers are?
ben
Yeah — good point. Why not identify someone that’s doing it right and praise them?
HP.
We do have a CMDB. We bought Opsware.
It at least has all the servers, OS, h/w for each client
What a series of articles! Absolutely stunning and accurate information, to say the least. As a long time IBMer, I have seen and experienced these patterns and behavior by the IBM bigwigs.
Having seen IBM as a research based company with good products, it is depressing to see that the company is now only making money of its services business. Sadly, the people providing these services are never paid well. Many of us have not received any raises in years. The PBC ratings are manipulated to reflect that one is inefficient, although in no way one is so! Non-technical managers are appointed to manage technical people, with frequent change of managers! Only the top management requires all those millions and stock options to survive and the regular employee does not. Regular employees have to pay to buy IBM stock! Even the stock option for $1000, allotted as pat of IBM’s centenary, can only be exercised in 2015, by which time perhaps all of us would become ex-IBMers!!
I strongly believe that the top hierarchy of IBM should be classified as crooks-in-suits!
With all the overseas off-shoring, trained folks are not retained at all, even in those overseas locations. It is like a revolving door with people coming and leaving. Most leave, as they are poorly paid, as compared to other companies, especially in India. It is no wonder that customers are not happy with the services provided by IBM.
Yet you toil on, enriching the people you think are crooks. Why?
Leave IBM? Have you looked at the job situation in the US lately? If I could afford to retire, I would. I can’t afford to retire or be unemployed. It sucks to be in a situation where you have to work to pay the bills.
Unbelievable this is not more widely known. Somehow th enews channels need to get this story and blast it at 11pm. IBM restructuring to off shore all employees not in management by 2015! That will accomplish the same thing as the request above. Disney saw it, so do customers I have worked for as an IBM employee for quite a while. GBS employees myself included are either scared cowering lambs waiting for the slaughter, or brushing up their resumes looking for someplace that still respects their work. Wake up Wall Street, IBM is becoming an Indian.Chinese, Costa Rican, South American etc. Company no longer a bastion of US respect.
Bob, you should get in touch with New York Senator Greg Ball. He has been active in trying to get the message out.
Written by Greg Ball, 40th District State Senator
Tuesday, 10 April 2012 09:35
Lewisboro (NY) Ledger: IBM layoffs are deeply troubling. By Greg Ball, 40th District State Senator. Excerpts: A few months back I stood alone, warning of my fears of relying upon promises from IBM, a global outsourcing giant, without getting those guarantees in writing. I simply asked that we get a confirmation in writing. Nothing more. Nothing less.
Alone, I warned our leaders that we should not reward these global giants with an even larger giveaway of corporate welfare, without getting confirmation that such funds would not be used to outsource American jobs. Not even a few years prior, we found IBM cashing checks from taxpayers while simultaneously patenting a new technology specifically designed to outsource New York jobs. Sadly, instead of learning from the past, IBM was handed another $400 million in incentives, direct and indirect. As small businesses everywhere are shutting their doors, I spoke out about the fact that this was an unacceptable risk without written confirmation to protect American jobs.
Now, once again, we are seeing IBM layoff hardworking New Yorkers. These new layoffs are deeply troubling and once again show why my demands that NY state demand specifics from IBM were legitimate. Let it be clear, a private corporation does and should have free reign to operate freely, but when they accept taxpayer benefits we must make sure that those dollars and our jobs are truly protected. We must hold IBM accountable for any direct or indirect benefits they receive from NY taxpayers. They have already received hundreds of millions of dollars from New York State taxpayers. We have a right to know what concessions were secured as New York decided to give $400 million to a group of companies that are known for off shoring jobs. …
The incentives handed to IBM should have in return delivered a commitment to keep jobs in New York. They also could have been divided into 1,600 or more small business loans, spreading opportunity to new businesses and entrepreneurs statewide. In fact, a portion could have immediately went to fix bridges, roads and crumbling infrastructure, putting thousands of New Yorkers back to work. Instead, we have once again made a deal, evidently without written guarantees, with a global outsourcing giant and the taxpayers are now left holding the bag as employees get pink slips. I don’t care if I have to continue to be the sole voice on this, this is unacceptable.
Another question should be: how do we fix the psychological and emotional damage done to the remaining employees who work in a low morale, stressful and demeaning workplace?
I would contend that the only way for the remaining employees is to organize. To have a true voice in the company and a seat at the table.
This means a union and a contract.
No more “management way or the highway”. No more unilateral decisions by corporate without any employee input. No more getting blindsided.
It is still not too late
http://www.allianceibm.org
That would be wonderful for IBM Management. It would provide them with a complete list of who to lay off first.
IBM says “No”, the Union calls a strike, and IBM fires everyone who doesn’t show up for work the next day.
Bob, you are exactly right. Even though IBM does utilize Applications and System Controls Accountability (ASCA), it is sketchy across the board. The auditor’s focus on meaningless data half of the time and miss the point of being “accountable”. I just moved into a new department and the list(s) of diagrams, servers, apps is sketchy at best. However, fixing IBM? That would require Open Minded executives, my doubt rests on this initiative because there are none. I believe the problem with the way this company is run is the same as it was 30 years ago, the Business does not understand IT nor how it works and functions as a whole. The decisions made never have the best interests of IT, yet it is an IT company, kind of an irony is it not? The tools, thus software solutions are available, the coordination is not there. Duh, I guess that would be bad management if they do not trust the IT department to do what it does best and that is the technical side. IT departments should be run by IT Engineers, Architects and Specialists not HR Managers or Finance. Give us a budget, a model for expenses and we can sort out our own priorities.
Sorry to say, but IBM is no different than most in the banking industry, or any large company driven by quarterly expectations of wall street (as Bob wrote about in … 2006?)
Here’s a different wrinkle on the problem.
https://www.nytimes.com/2012/04/13/us/whistle-blower-claiming-visa-fraud-keeps-his-job-but-not-his-work.html?_r=1&pagewanted=all
I wouldn’t be surprised if what he has uncovered is an unusual case.
On the account I used to work on, which IBM has since lost, this information was readily available, and more. It was updated on a regular basis, and reflected the state of operations fairly accurately. This may not be true across all accounts, but it has been true in the ones I’ve worked on.
This isn’t the problem, Bob. I understand your point, but being able to respond to ad hoc audits isn’t going to help. And, honestly, saying you can fix IBM in a week is ludicrous.
But you’re on the right path. It will take a groudswell of IBM customers to get the attention of the execs. IBM’s customers are dedicated and committed to IBM for the long haul. You can’t ignore the investment they’ve made in hardware, software, services, training, and so on. They aren’t just going to throw that away.
Instead of a confrontational “do this now or else” approach, what’s needed is a true, autonomous, Voice of the Customer organization to be formed, separate from IBM, which would be the group which holds IBM’s feet to the fire about delivering. It can’t work on a contract by contract basis with customers individually. The customers have a collective financial position which could get the company’s attention in a very influential way. We used to have groups somewhat like this, like Share and so on, but they were weak and had little real influence. This group would need to be known as the real collective influence on IBM and not be passive. It needs to brandish a very large financial stick to beat IBM over the head with when the company doesn’t deliver. Call it a union of IBM customers who all move together. Let them call a strike and stop contractual payments if IBM doesn’t deliver. Collectively, that would work.
Stop nickel and diming IBM, and playing gotcha politics with them. Think Big. Hey, there’s the name of this new organization! THINK BIG. You have to do things on a scale which surpasses IBM if you want to have the kind of influence over the company you’re talking about. Only a group comprised of the majority of IBM customers, who speak to IBM with one voice, can do that.
Been There is absolutely right. Good comment. Further, it should also be said that producing reports is something IBM does well. Producing results? Not so much. Everyone knows groups that routinely produce reports for the executives which show all SLA commitments met and no issues at all, when that’s not really the case.
If IBM customers began to create their own sets of reports measuring SLA attainment, and documented every breach, then used that as the opener to discussions with IBM, that would help. If they did this as a group, that might really provoke some change.
But that won’t happen. Yes, organized group effort would be better but piecemeal is all we’re likely to get. These questions are an easy start to changing the relationship one customer at a time. If IBM only came to install systems to answer just this one set of questions that would be a huge improvement because of the change of thinking it would require. Baby steps are possible here and this one requires only a few CIOs to implement.
That kind of thinking will get you exactly nowhere, Bob. Doing it one at a time would let IBM bury you, like is does over and over again.
If the right value proposition is put before IBM’s top customers, the biggest of the big, you might see more traction than you’d expect. They’re not happy with IBM all the time, either. They want a say in what the their primary technology supplier does to help support their own business needs.
Think of it as a SuperPAC with teeth. The model is already there.
Just like “been there”, I am an IBMer working on engagements with 2 Fortune 500 Companies – and both engagements can produce the lion’s-share of the data you are asking for – immediately. I do not think that the same could be said for all IBM engagements – but it’s true for many.
The problem is not being able to answer those questions. IBM has processes in place to manage that aspect of the services they provide. The mantra on well-run engagements is “Compliance First – Service Next” – and the Compliance aspect generates the answers for the questionnaire being posed in the blog. The problem is with the “Service Next” aspect. Both these engagements are fraught with issues about being able to deliver beyond just keeping the doors open – which is really all the questionnaire is focused on.
As for the off-shoring – IBM has been selling the kool-aid for over 12 years that cheaper off-shore “talent” will improve your bottom line by significantly reducing IT costs. And the CEO’s of their client base has drank heartily from the pitcher (Oh Yeah!). It wasn’t until 5 years ago that IBM got serious about doing the same off-shoring internally. Most of this cost-cutting, EPS improvement is driven by the PwC faction within IBM. (IBM acquired PwC Consulting in 2002).
The MBA Bean Counters in the PwC faction are doing all they can to meet WallStreet’s needs for sexier numbers so they can be rewarded with a higher Stock Price. IBM is not sexy – Revenue growth is in the single digits, not double digit growth like those found at sexier startup companies. The only way IBM can show sexiness without those types of revenue growth rates is to improve it’s profit margin – which means significant cuts in expenses. That’s where the off-shoring and hiring of cheaper, less-skilled labor in the US comes into play.
Execs do not get as rich from the salaries they garner from companies like IBM – as they do from the increase value of the Stock Options they are awarded. Stock Options reset the $0-price of a stock to the strike price. Over the past 10 years, Options have been issued with a Strike Price around $80-120. With the stock north or $200 recently, these options are worth a significant amount of money – with far more capital gain (100 times cost) than if these execs were forced to buy the stock @ $100 (merely doubling their investment).
This is a large part of what is driving the actions taken by IBM. The other large part is that IBM is redistributing the work force offshore to localize the work force to where the new business is coming from – offshore.
A great list and this should be extended to ANY OUTSOURCED SERVICE PROVIDER, not just IBM …. hand it to your rep from Computer Sciences Corporation, Scientific Applications International Corp, Accenture, Xerox-ACS, InfoSys, Tata, etc. Valid for every single one of them and a great reason why outsourcing IT support OUT of company and OUT of the country is brain-dead STUPID. Because if you have to REBUILD!!! This is critical information to have and I, for one, have been through that when my servers fell 103 floors to the ground on September 11, 2001.
I think the larger point may be missed.
Workers, in ANY business, are no longer people. They are costly commodities to be cut in order to increase shareholder value. If it doesn’t increase shareholder value, we don’t give a rat’s ass.
This is the NEW American Way.
and I weep.
The list is good for hardware. You need to be asking the same questions for software services. What people are working on what projects, what each one of those people has done for the week, their business experience, their software experience training. It is super easy for IBM and EDS HP to hide inadequate resources or bill for nothing even.
I personally fired somebody from my project that couldn’t even write software for a simple report. I later found that India had moved the sorry resource to an even more complex part of the system where they could do greater damage because they knew that nobody was lining up resources or keeping track.
Once again, Bob, you failed to address the US IBM employees directly. What will be their fate if they continue to fear organizing? Obvious answer: They will be gone, way before 2015. Do you find that Alliance@IBM is irrelevant? I see that they recently posted all 4 of your article parts on their web site front page “Articles” section. Their ‘Your Comments’ section is also filled with discussions about you and those articles. Is there any ingredient that the employees can introduce to help IBM realize they are “circling the drain”? What if the employees are unionized? Why are you avoiding that aspect? I personally don’t see why the employees are not heavily picketing and making noise in the MSM. Care to make an addendum to your 4 part series, regarding the organizing of IBM US employees? Or are you avoiding doing so because you think it is irrelevant?
When somebody close to me is going down the wrong path I’ll try to point out the error of their ways pretty passionately. This series was the longest on any one subject I, Cringely has written in years. Is it possible that Bob secretely has a soft spot or long standing fascination with IBM and wants them to rebound and succeed? Or at least stick around so he can keep analysing them?
While other companies like InfoSys, TATA, WiPro etc. continue to make inroads into big technical projects in the US involving business transformation, it’s being done by a cost case basis, so what does IBM do? It decided to take the same road, hiring the same workers off shore these other companies vie for, how can they compete by just being higher cost but with the IBM Name? Used to be hire IBM, if your project failes you were not blamed. Now the respect for IBM as an integrator is gone. So to compete, When India becomes too expense as it has begun to, IBM goes to Russia, China, etc. Why hire a US resource when you can get a three resources remotely in the age of remote computing etc. Anyone find an issue with “Hey lets hire IBM to work on a super-sensitive project involving IT, then have communists programming for us”. What a country! Oh and Obama probably rewards IBM with more tax breaks every time they put a whole team of software engineers or consulting group on the street. Yes people need to be more productive today, and yes they need the respect as highly intelligent college educated members or an organization. Employment may not be for life like in my fathers day but in IBM all respect for the at will employee is gone
Bob: Here is a little historical perspective to keep in mind. The fact of the matter is that CIOs have asked IBM executives about items #1 through #7 ever since IBM’s strategic outsourcing operation started. They may not have asked for them all at once, and they may not have asked for 1-day delivery…but they did ask for them.
Sometimes, IBM could provide the requested items within a reasonable timeframe. Much of the time, however, they could not. These failures occurred for many reasons, which at the end of the day do not matter.
What DID matter, however, was that in the end the CIOs changed the outsourcing relationships. No longer would IBM be given the grand, single-provider contracts worth hundreds of millions of dollars. In most cases, IT outsourcing work would be handed off to groups of vendors, each of which was responsible for a segment of the work. Server management might be handled by HP, Help Desk by IBM, other pieces by CSC, ACS, Accenture, etc.
Also, there would eventually be an increased focus on vendor management by outside parties. These outside consultants (brought in by the customers) would focus on various aspects of the outsourcing agreement itself, starting from the beginning negotiations: Is the customer receiving appropriate value for their money? Are industry best practices being followed? Are the contract terms satisfactory between customer and provider?
The net effect of this transition is that IBM’s outsourcing operation would no longer be the cash cow that it once was. Sure, IBM would get lots of money…but they were now expected to provide more for the money than they once did. If the customers (or the vendor management consultants) did not like what they saw, then it became much easier for customers to discontinue the IBM relationship and go with someone else.
This is what has been happening in the background, and it has resulted in many of the symptoms your articles have described. Customers have indeed asked the questions you pose. They often did not like the answers. And yes, they often terminated the contracts. The terminations didn’t occur within just a day, but they did happen.
That’s where we are now. It’s not only for EPS or management greed that IBM has been firing workers. It’s also because they have been losing a lot of customers from what was once their cash cow.
Bob, you should try to ferret out additional details about Roadkill 2015. It’s not even all about offshoring or divestitures, although those are big. I believe the effort includes other drastic cost-cutting measures, some of which may be just as crazy. I understand that there were a number of brainstorming sessions held to come up with ideas which included moving the entire company to google mail, and similar propositions. My guess is that they are attempting to be “forward thinking”, as in, “What do we do to raise EPS when we’ve dumped all the employees and still aren’t making or selling anything?”
IBM has a shareholder meeting next week in Charleston, SC, where I used to live. I wanted to get this information out in advance of that meeting. It’s looking like I might do a follow-up net week with additional material and possibly anything (or, alas, nothing) that falls out of that event.
I’ll bet the SH*T hits the fan tne way or another
A video recording (if possible) of that conversation would be priceless.
Bob,
I have read all five of your articles now. Your website link circulated via ST (SomeTime) like excrement through a goose. All are spot on! Thank you!
Point 1:
You say “open up a can of whoop-ass”.
It is called a critsit.
Point 2:
Nothing will change until it has a negative effect on Executive compensation. Blogging, articles in NY Times, Forbes or Business Week will have NO IMPACT. The Execs DON’T CARE!
I am also glad that Bob addressed the Disaster Recovery plan. As I wrote, my servers crashed in the World Trade Center event and I sincerely doubt that a helpdesk in Bangalore can restore servers by phone. If I am being sarcastic, I am but I have a colleague who IS a certified DR professional and who HAS RUN recovery scenarios at the large Sterling Forest, NY facility – due to be hit by further cuts in those overpaid, USELESS DEADWOOD American workers. I have seen the inside of their data center and rack after rack of servers are dedicated to CLOUD COMPUTING and if you think these machines magically run all by themselves WITHOUT LOCAL MANAGEMENT, then you are a fool. IBM probably believes you can have 5 people at Sterling and that is IT as everything else can be remotely managed from India. I guarantee you that you cannot remote into a NON RESPONSIVE SERVER. Plus DR plans need to have LOCAL MANAGEMENT to actually do the work. We did not restore our serves post 9-11-01 by phoning them in. Restoring over 1,100 computers was not a remote job either. We did not call India. We did the work ourselves and under a great deal of pressure I might add. But IBM – well, always ask for an email survey and our eager technicians from Bangalore will be earnestly eager to assist you. (Oh, my IBM response page always tells to write or ask for an email survey?)
It’s not far-fetched if the servers themselves are in Bangalore.
That would be the goal of these ‘US’ companies.
As far as remoting into a non responsive server, there are such things
as iLO/RILO/MP/HMCs that allow access, but if you have cabling, or
other H/W issues do you do indeed need onsite personnel.
What’s scary is now they are moving the higher level jobs ‘design’, ‘architecture’
to BRIC and the IT h/w will follow, inevitabley the business overseas will get bigger.
What’s left to do in the US?
That’s inevitable. Management has to follow the workers. Upper management, then finance will follow.
Ultimately, the company is where the factory is. The market responds to both price and quality. If the quality suffers, then the price must fall. IBM might just find itself competing with nameless products from China, or wherever the next low cost labor location is. So far that has been the US, then Japan, Korea, Indonesia, Indian and now China. Brazil is up there with China right now.
What Bob is pointing out is that large corporations move. Giant corporations shrink, small corporations expand. Big business stays big by buying smaller corporations while continuing to shrink overall. The successful Big Businesses just buy enough to stay big. Look at HP-Compaq, or Microsoft, or Oracle. It’s all the same sort of process.
The Stock Market Shell Game.
The only place for real growth is in small to mid sized businesses. Say, 50 to 5,000 employees.
[…] Here is the link. […]
The story goes that Ethan Allen (sometimes attributed to Ben Franklin) was visiting England after the Revolutionary War and saw that George Washington’s picture had been prominently posted on the walls of English outhouses. His response” “It is most appropriately hung, as nothing ever made the British sh*t like the sight of George Washington.”
I would imagine your list is “appropriately hung” and is having much the same effect on IBM sales reps right now.
Not to toot my own horn but I am a one man operation for an org and I can easily produce most of this now. We don’t do help tickets (there is only one of me and 99% of their problems are “plug it in”). I have network maps, firewall rules the whole nine yards. I can’t imagine any vendor worth it’s salt would not have this immediately available in a customer file of sorts. Good job Bob in waking up the big blue slow machine.
One more thing. I have dealt with Indian support with Alcatel-Lucent products and it is HORRIBLE to say the least. I can’t understand them, they don’t understand me and it take a long time before anything is actually solved. Pica8 and companies like it are the future of network hardware.
This is a fine set of questions for any Outsourcing customer to ask, but what would a list look like for IBM’s larger group of software and services customers?
@Tony Byrne: Ask IBM to produce up-to-date versions of work products which should be standard in their methodology:
Project Charter
Architectural Overview
System Context
Configuration Management Procedures (this one’s especially interesting, as it lays out the concrete production, usage and storage of work products)
Component Model
Operational Model
Risk List
Issues List
etc.
If IBM cannot produce these documents within one day, it means that they don’t follow their own method, which in my experience means that they don’t follow any structured project method or concept at all, but just fly by the seat of their pants.
The answers can be produced in seconds: It’s all in the Cloud, why do you care? We are taking good care of you, do not worry, all is in the Cloud. So please stick your head out of the Fog and embrace the Cloud over you.
Everything is “in the cloud” – I trust you are being funny, but in case you do not know, NOTHING is stored “in” the cloud. Again at Sterling Forest NY there are tons of IBM servers storing cloud data for a wide variety of firms. I have seen then, nicely labeled. Ann Taylor, etc. So these are not “in” a cloud but in a (GASP) IBM DATA CENTER!!!!!!!!!!!! OMG. So, the list DOES apply, doesn’t it?
Change will come to corporate strategies when U.S. laws are changed. The current laws that ‘protect’ American workers are what is causing the loss of American jobs.
Poor performers cannot be fired without a long process; OSHA; Race based hiring requirements; Taxes (Fed, State, Local);…for starters.
Laws in these areas must be modified!
Find a model where hiring an American is cost neutral or near an off shore job and those jobs will return.
The nonsense about a union will only accellerate the off shore process. Americans are keenly aware of the damage done by unions to the manufacturing industries. It would be like ‘bleeding the patient to make them well.”
Get the government out of business!
That’s ridiculous. Most US employees work under “At-will” employment. Employees can be fired for any reason whatsoever, there is not a need to prove poor performance, and taxes have nothing to do with firing employees. The few toothless laws that do exist are intended to ensure that there is not discrimination in resource actions. We all know that there is, especially against older workers, but it’s impossible to fight this against millions of dollars worth of legal staff.
Here’s where the laws need to be changed – companies that do not hire and retain US workers should not be eligible for tax breaks, stimulus money, and government contracts. We should not be providing incentives to companies that offshore jobs. Just imagine – when you are offshored and collecting unemployment, they will take taxes out of that, give some of that money to the company that offshored you, and claim they’ve rewarded “job creators”.
You are an idiot whose time is long past. You must have been around during the late 19th century when “government” interfered with robber-baron capitalism, and you didn’t like it then. You’re an antique. There are 23 Right-To-Work states in the US, and that means anti-union in case you didn’t know. The rest are all ‘At Will Employee” friendly. The laws that destroyed unions were passed in 1947 (Taft-Hartley), and afterward during Reagan’s Administration. The NLRB has been decimated by anti-union board members for the past 30 years. Where have you been?
Many of the companies, if not most, that have offshored to BRIC and others were NOT UNION IN THE FIRST PLACE…got it? Cheap labor and greed opened up this country like blood letting did in the medieval times. Bleed the US so it will get better. Like I said, you’re an idiot that needs to get a real education. Go for it.
The only law that these companies have to worry about is the WARN act, and Bob have a previous column on how IBM (and others, including EDS/HP) evades that be small, just under the reporting level firings accross the company.
(notice I don’t call them layoffs..)
Don’t forget if you send everyone home to work they have no site and therefore avoid the WARN act completely….virtual work has it’s political advantages…..it’s a huge divide and conquer leaving employees isolated and helpless in all cases……
Ha ha. Very funny. Your country protects American workers by shipping their jobs overseas.
Too many times I saw inside IBM the selective use of surveys to show a biased appraisal of our organizations capabilities. We were coached only to send surveys to sponsors that we were sure would give us good results.
IBM is thoroughly corrupted inside and my former colleagues are playing the game. As US employees we accepted the internal corruption ourselves. We saw organizations providing bogus sales numbers yet we look the other way because we too may have been paid on those numbers.
The IBM help desk in India participates in the corruption by closing older tickets and informing their internal customer to open a new ticket so that their time to resolution is not badly affected.
This fish stinks through and though from decades of internal brain washing reducing employees integrity a little bit at a time.
Glad to be gone but I wonder if my soul is intact.
Just curious, but do those figures make their way into the annual reports?
Do other IBMers get the feeling that we are truly working for a bankrupt company? There is no money for even the most basic needs in IBM. I don’t feel like I am working or representing a successful company but one that is on the verge of going out of business.
I have associates in other large US companies and I see what IBM used to look like. The look and feel of success is thrilling and motivating.
Besides the constant thread of an RA, the depressed feeling of working for a bankrupt company does not motivate me to achieve. But, do not worry, because the sales numbers are never good enough there are plenty of micro managers ready to tell you how to do your job even though you know they only succeeded because the sold product during the dot com era.
IBM isn’t bankrupt. It is flush with cash. IBM is BEHAVING (wisely) as though it were bankrupt in order to accumulate cash. Don’t kid yourself. Large and medium businesses throughout the US have done this since 9-11. Thanks for writing. Keep your cards and letters coming.
I don’t think IBM is bankrupt or CEO salary wouldn’t have increased 5-6 times as fast as that of the average worker. The proper turm would be ‘scrooge-like’, frugal. Needed resources, that require capital, aren’t available anymore. Granted, past austerity programs may have been benificial, but it’s gotten to the point that schedules are being missed due to lack of resources.
If you’d like a lift of spirit, interview elsewhere. It was refreshing and helped lift the dark vail that now shrounds most US IBM employees.
Why are resources needed if their lack doesn’t interfere with profits?
The purchase of ISS X-Force Security Operations Center is a good example of destroying customer value during an acquisition. We dropped a $250k/year contract with IBM after doing the following:
* Request report of all hardware installed
* Request Executive Report of value gained from service
* Request review of SLA call matrix for Sev 1 incidents
What we got:
* 45Min Technology review of what they can offer us (that we already bought?)
* That we were not tuning IDS correctly
* Real value starts after we add additional $250K/year in services (undersold?)
* 260 actionable cases generated in previous year ($9k/ incident good ROI?)
* Executive report printed with a low toner printer (Didn’t they make printers for 40 years?)
What we did:
* Gave 30 Days notice that contract was in breach
* Canceled monthly SOC bill and returned all IDPS devices on lease
* Migrated IDPS service to a NextGen Firewal and IPS at 1/4 TCO, with 950% ROI (so far, after 4 months transition)
Result:
* $20K saves FY12 -> $140K Savings FY13 -> $210K Savings FY14 (projected)
NOTE: This was ONE small SOC service canceled.
It’s reassuring to know that HP hopes to model its future self on IBM.
I believe that the HP CEO said in interviews that she wants HP to grow talent like P&G, not IBM.
I think some of you are missing the point of this…
Companies pay IBM $M’s a year to support their stuff. The costs are often based on the number of servers and applications. If they can not instantly produce an accurate list — how do you know you are being billed accurately?
A critical application that runs your business fails. Someone calls in and reports “application xyz” is broke. Can IBM instantly tell you what systems it runs on? Does IBM know this application is critical to your business?
Lets assume IBM has a clue about your critical application. Do they know what software behind the scenes makes it work? Could they trace the data network needed for it to work?
The answer to most of these questions is usually NO. How long is it going to take IBM to figure out what is wrong, find the right talent to work on it, debug and fix it? Remember, this application is critical to your business. The longer it takes, the more money YOU lose. You’ve hired IBM to support your systems. Can they? How well?
Your articles are good to see and as someone who has been with IBM for some time I think you’ve done an overall good job capturing lots of points.
It is however fairly service oriented. You haven’t really addressed what is going on in Software Group or STG which is where products get made. This was something I was looking for.
From my vantage point IBM management does not understand what it sells. It does not understand how to create much less sustain efforts to create and market products. IBM servers and software are not any better than it’s competitors. IBM *COULD* be the Apple of the business world but it’s not. For some the perception from the glory years remain and they think IBM is more than worth it but the reality today is buying IBM isn’t a good choice.
These things are fixable. The change however is a management one. I doubt there is the motivation. Failure of product/services just results in more layoffs.
There was a point in time in the not so distance past where intersite rivalries were quite bitter. Gerstner put a stop to that. As a result, it didn’t matter where one was located, we focused on what was right for the customer, what was right for making product.
The management enforced “rivalry” now is intercountry. Preference is being given to India, and China who both have very poor track records when it comes to IBM accomplishments. Brazil is much better. It doesn’t matter what makes good engineering sense. It doesn’t matter what is right for the customer. India, China and Brazil are the answer over and over again. The skills aren’t there as Bob has rightly observed.
IBM needs to change from a system fixated by minimizing for engineering costs to maximizing for revenue and profit by sale of top quality systems, software and solutions. IBM needs to be blind as to location and cost of employee and get back to quality. Apple does this and they are fabulously successful. There’s no reason why IBM couldn’t and shouldn’t be as well.
It’s funny but US employees for instance have currently 4 year cycles to get an update to their current one and only office workstation / laptop. Doesn’t matter if the laptop can’t do the job. Nothing will be done until the time period is over. It’s not uncommon to hear about employees going out and buying their own replacement just to get their job done.
There is dedication by IBM employees. It’s IBM leadership that has failed.
I would like to hope your articles will turn things around at some level. I do know some executives within the company get it…
“IBM needs to be blind as to location and cost of employee and get back to quality. Apple does this and they are fabulously successful. There’s no reason why IBM couldn’t and shouldn’t be as well.”
You do know where Apple makes most of it’s products? It’s not in the US
All aspects of Apple engineering is done in the USA. Manufacturing is done in China.
I’ve thought for years that any company that would even consider to outsource with IBM, EDS/HP, or whomever must have a bloated wreck of an IT shop to begin with.
I’ve heard horror stories over the years from companies that have turned to IBM, only to regret it almost immediately.
If any CxO reads this series and is still contemplating having IBM run things for them, they’re making an egregious blunder. The irony, of course, is the old adage was that “nobody was ever fired by buying IBM”.
You over estimate the intelligence of the average CIO.
Well, it’s true what they say, misery loves company. Cozy in here isn’t it!
My job’ is OK, not great, not me dream job, but OK. I get a lot of freedom to explore other things if the desire takes me. At the same time I know I have a job to do and if IBM wants me to spend 75% of my time doing ‘process’ instead of what I’m actually good at then so be it, he who pays the piper calls the tune. However I am under no illusions as to my job ‘security’ or lack thereof. That’s just a fact of life in the world today.
I admit, I’ve had my little gripe in here but here’s the thing, We all know there’s little company loyalty left in either direction in IBM but that’s true at most businesses these days, especially big ones. There’s a lot that could be done inside of IBM to address that, true openness from management might help to start with but the reality is, it probably won’t happen.
I do what IBM expects of me to the best of my ability. If things move slowly because of ‘process’ then it’s not my problem, that’s what they pay those execs for. If I was ‘happier’ would I even be able to do ‘more’? Probably not.
I could sit here and bemoan how ‘bad’ IBM is, I could agree with Cringely and everyone else but the reality is, the suits don’t care, they actually made it this way. It would seem that this is what they actually want. To any reasonable person (IE, all of us I guess ) that approach seems daft but who’s getting paid the big bucks?
As human beings we want to feel that we are important to each other but IBM, like other businesses, is just a corporation and in spite of what the supreme court may say, until Texas executes one, I don’t expect to be treated as an equal when dealing with a corporate body (in spite of the fact that there are actual people behind it). After all, when you receive missives from corporate about the latest exec reorg, do you care, does it really affect you? No, because they are operating at a different level from the rest of us. Their (exec’s) reality is not ours (worker’s) and the two will probably never meet either.
If you want to deal with the CEO of a company, be self employed (or married!).
Businesses are living entities, they come into existence, they grow, they grow old, they wither and die. I’m not sure if IBM is in the latter stages of life or if it’s just very sick.I’m not even sure if it can be cured. I’ve been around IBM (mainframes) my whole professional life and like a old faithful pet dog, I’ll miss it when it’s gone but (I hope) my life will not stop. Even my dog had bit he hand that fed it from time to time (OK, once and I learned not to put hand in angry dog’s mouth!) but that does not stop me caring about it but I doubt my dog actually ‘cares’ about me (except at meal times!).
I have a relationship with my dog but my perception of it is probably a lot different from that of my dog. I don’t think it’s that much different with work (whoever the employer is). We want to think they care, it makes us feel important but it’s really just a business relationship.
Take the emotion out of it and it is what it is, just a job. to be honest I am not even sure why Cringely has taken such in interest in IBM suddenly. After all, he does not actually work there. Maybe he thinks IBM is ‘too big to fail’ and we all know how that works out. Maybe he thinks it should treat it’s employees better (not sure why). Dealt with your bank lately? They have a vested interest in keeping you ‘sweet’ and they don’t,why wold an employer be better?
All I’m saying is that it is what it is, make the best of it and move on.The alternative to to sit here, bemoan how ‘bad’ it all is and generally depress ourselves out of existence. Personally I’d rather smile, even on a cloudy day. You can only feel sorry for yourself for so long, after that it’s time to get off your backside, dust yourself down and get on with it!
Right on. The first sensible comment I read today.
Wo cares? (1) customers, and (2) investors.
Employees who are unhappy can just leave. They have the best information, and should act on it. Complaining is good for temporary stress reduction only.
Customers and investors, on the other hand, not only have poor information, they also have to sift through active DISinformation, which is disseminated by management, for their express benefit. As an investor, hearing this kind of information from employees is invaluable. Complain away folks, I’m all ears.
I thought your sort of old-fashioned investor went extinct with algorithmic trading.
This series of articles accurately reflects the current state of affairs, and I appreciate what Mr. Cringely has done to draw attention to the situation. IBM was once the paragon of American business, and was well respected as an American institution. Unfortunately, it is still the paragon, but now it is the prime example of the subjugation of America’s innovative spirit to the financial interests controlling the global economy. As Mr. Cringely points up, there was a time when the IBM brand stood for innovation. Can anyone think of a recent(or even not so recent) innovation that came out of IBM?
Mr Cringely’s laundry list of questions about support can be collapsed into one question. Ask IBM to tell you about the Service Activation Deactivation process. SAD – yes, sometimes acronyms speak louder than words – was instituted at the inception of the massive US layoffs. It is essentially a process of watchers watching the watchers watching the doers. It was put in place to stabilize the problem, well documented here, of untrained, unskilled, inexperienced workers supporting large, complex data center environments. One might think that an IBM data center is operated in the fabled ‘lights out’ manner, with machines autonomically running machines with automatic provisioning, and sensor based self healing problem detection and resolution . Indeed, that is what the Smarter Planet strategy is selling, eg, machines that can be leveraged to manage our electrical grids, water systems and so on. The SAD fact is that this is no closer to reality than it was in the days of the 360; in fact, mainframe environments are probably closer to the mark than the more common decentralized, distributed data center environments that exist today. So while Smarter Planet is being sold as a panacea, and Watson is playing Jeopardy, the reality is SAD – an army of people making sure the wheels don’t come off, using an extremely labor intensive process. Some have wondered whether it would be less expensive to just let the wheels fall off. From a customer perspective, it’s a bit like buying a performance car, then getting it home to find there’s a bunch of mice on a treadmill under the hood.
That’s the SAD part. We once put a man on the moon in less than ten years from a standing start. That used to be us. American ingenuity, IBM know-how, can make Smarter Planet a reality, instead of just another failed marketing slogan. We have the technology. We’ve proven repeatedly we have the native intelligence. The world is at a crossroads, and there is no more time for delay. Can IBM truly accept this challenge? To do so would make it a revered institution once more.
I hate to break it to you, but there is a VIBRANT start up community in your country where innovation is the stock in trade. And I can guarantee you if you work for one, you won’t need 10 forms in triplicate signed by 45 managers to change a shell script.
Bob,
I think the problem is that IBM does not want to be fixed.
The same thing happened to Sony some time ago that preceded their downfall from the top of techno gadget world. Middle managers, many of them not from the US or Japan, took the business opportunities and processes they learned
from US and Japan shops and shipped them overseas to duplicate the same product at fraction the cost.
Trouble was, all the creative that invented and designed new things either left or let go, for sake of efficiency to market or cost trimming.
The thing is, the middle to upper management at IBM, HP, Yahoo, AOL, and so on, no longer have any loyalty to anyone, much less to a company or its people.
The same product and processes they learned to use to pad their bonuses and severance packages they can repeat anywhere.
They are only there to milk the cow dry, not to take care of the ranch.
Smarter Planet (she’s fighting back). Dumber people. Slogans are the only products that IBM management can create.
I had a temp assignment with some Global Services people some years ago. Their charges were to IBM, not the customer and were astronomical, and waaaay more than I was allowed. The global services people said that is they were used to charging customers. I was appalled. So, I agree that perhaps an additional request to the IBM rep is individual costs of the people they are using for the project.
It’s not Bob’s point so it’s fair that he didn’t mention it. But possibly the most important point that Bob’s expose makes clear is that EVERY CEO of EVERY IBM client company is an incompetent idiot!!! How else can one explain that they are all paying lots of money for services that none of them are receiving?????!!!!! All IBM is guilty of is accepting money from idiots who are all too willing to buy unseen and undelivered goods (services).
Funny how all those CEOs are making millions off their idiocy.
I’ve found in life that money != competence. Al Dunlap proved that in spades.
Here is the problem – the premise that IBM can be fixed. It can’t.
The IBM that many of us knew and loved 20 or 30 years ago had some key qualities – excellent customer service and respect for the individual (employee). If you take care of your customers and employees, your investors will probably do well too. When I joined in 1992 to do operating systems work it was a long dream come true.
Old IBM had problems – it was bloated with many people who essentially retired on the job. Performance problems were not dealt with using the existing mechanisms because people were too afraid to hold others accountable except in the most egregious cases. Group-think dominated. Old IBM was not sustainable and there had to be changes to make IBM a little leaner, a little more agile, a little less risk averse.
Lean doesn’t have to be mean though. In the last 10 years the culture as devolved from “respect for the individual” to “office survivor.” For 364 days a year people are supposed to team and collaborate selflessly – and then on day 365 somebody gets thrown or voted off the island. The unrelenting drive to cut costs instead of growing revenue has had some nasty effects on employee morale and the quality of products and services. In the quest to become competitive IBM has become average. And you can’t charge above average prices for average or below average products and services.
Pockets of resistance exist in IBM, but they are aging out. You can’t turn time backwards; you have to move forward. The new IBM isn’t the core problem – it is a manifestation of problems we have as a society. IBM was able to grow and prosper because it had the benefits of our society; a good educational system, clean air, a reasonable government, etc. IBM now (and many other companies) don’t seem to recognize or care; they owe no allegiance to anybody. (See “mercenary” in the dictionary.)
I’m proud to have worked on some great projects with some great people while I was there. But I’m dismayed to see what happened.
I learned about IBM’s “respect for the individual” from
https://en.wikipedia.org/wiki/IBM_and_the_Holocaust
IBM is arguably a well managed company. They don’t have the ability to produce innovative new products but they do have a reputation that still carries weight and a potent sales force. They will make good money almost until the day they file for bankruptcy. The cash cow analogy was nearly perfect.
Bob there is only 1 reason IBM is going down the drain and we all know what that is: IBM is 71% workers from India – where the average IQ is 81 and the workers are ranked 54th in world productivity accoring to a 2008 ILO/UN report. You know it and I know it. Let’s just admit IBM is falling victim to the India, Inc. Syndrome the same way Sun, PeopleSoft, and Bell Labs did, just to name a few. When it’s all over, maybe they can sell IBM’s smouldering hulk off to Oracle for a few bucks.
Bob there is only 1 way to save IBM and that is to do the needful.
Wakjob — you must deal with India all the time! Who teaches them English? Why am I always asked to “please do the needful”?
Add to that the Frankenstein word “Updation”
ROTFLMAO!!!!!!! Yes, please DO THE NEEDFUL!!!!!!!!
Cancel the contract and do what? I assure you it is the same at HP, Dell…they want it cheap and they don’t won’t to know how it is done. For the money some of these deals are going through for they are still getting pretty good service
I’m a current IBMer, since July 2010. My IBM career is a story about why IBM is in trouble.
I joined the Software Group with a particular skillset that’s not about installing and configuring software (ITSM – I’m ITIL Expert with plenty of process consulting experience) . It was a hire-for-fit rather than hire-for-specific-role — and I think the intention was good. But they’ve been totally unable to find work for me to do, and meanwhile paying me a full salary.
Of the 21 months I’ve been with IBM, I’ve been working and billing for about 10 months. I haven’t done a single day of work in 2012 yet. My management tree has been completely unable to engage me on anything.
And it’s not like I don’t want to work. I’ve been talking to everyone who’ll listen in IBM over the last 6 months, and I’ve found 3 different positions in other division of IBM that needed someone with my skillset and I could’ve done the work. But my division wanted to *internally* charge the other division $1600/day for my time (blue dollars) and the other division could only afford $850/day. So I couldn’t do the work. Yes, IBM would rather have me do nothing and pay me a full salary + benefits than work for a paying customer, because two groups can’t agree on an internal rate for my time.
And yes, I’m interviewing at other companies at the moment. I’ve had a couple of offers, but I’m taking my time to make sure I pick the right company for my next position.
Oh, and when I have been engaged, they’re billing me out at $2250/day. That’s just ridiculous! I’d like to think I’m worth that, but I’m not (12 years experience, but not worth that much!). It staggers me that clients (usually big govt depts) will happily sign the purchase orders for 6 months work at those kind of rates. As a taxpayer it makes me furious!
“As a taxpayer it makes me furious!” So the government is not only inefficient itself but spreads its inefficiency throughout the business world due to its economic power and inappropriate involvement in that world which, unlike itself, must be productive.
This is always your line about the government. But I don’t think the government is as inefficient as you think it is. And I don’t think corporations are as *efficient* as you think they are.
The government is inefficient since it has no real budget constraints, only the desire to grow bigger by making promises it can only keep by stealing from the productive members of society.
Organizational efficiency is a function of size and of management. With bad management, an organization of any size can be very inefficient. As an organization increases in size, the ratio of management/overhead to workers increases. When the organization passes a certain size, the ratio of management/overhead to workers increases beyond 1:1.
In a typical corporation, the cost-benefit for any worker needs to be around 3:1. That is, the value of the workers work needs to be three times that workers salary. That is at an efficient workplace. Few corporations manage a ratio lower than 3:1. Big corporations are commonly close to 4 or even 5 to one. GM is reported to be at close to 6:1. The US Government by contrast is a little over 8:1.
That is rather inefficient, but is still better than most nations, and massively better than any other “Superpower” has ever been. The Soviet Union broke up when it went over 12:1.
This organizational inefficiency is why we have never seen a global government. The UN is massively inefficient. Any government body of that size would be. the more control you try to exert, the more inefficient the process becomes.
This sounds a lot how the corporate legal world works. Make of that what you will. I decided it was time to get out.
Bob –
This low cost, low skill, no experience global resourcing strategy is not limited to the services part of IBM. It is hitting product development, maintenance and support with the result of products that are so bad they cannot be sold or have to be rewritten by experienced person in the US, the UK, Canada, Japan, Germany and other highly developed nations. It is also hitting virtually all IBM processes that effect customers from sales, to ordering, to fulfillment, to billing, to service. Literally everything that effects IBM internally and IBM clients/customers is being offshored as fast as possible to cut costs.
I see the effects and the failures of this daily. Customers are leaving, others are upset and suing or threatening to do so. These resources cannot do the job, yet IBM rewards them by giving these incompetents more work to do. The executives literally do not give a damn – all that matters are the short term numbers, making that 2015 target and collecting their bonuses.
We have our own name for “2015 Roadmap” – we call it “Death March 2015”. The company will pick us off one by one until there is no US personnel left other that boots on the ground that are required to service machines. The hall talk is that these survivors will become contractors – perhaps sold off to some service company like Qualserv.
The experienced craftsmen and women that used to design, build and support product have been pruned out of the business through getting RA’d solely because of maniacal cost-cutting.
If IBM had to write a new operating system from scratch, there is no way the company could do so – the skills and experience are gone.
IBM can’t develop its own new software either – the software portfolio innovation is through acquisition of agile, innovative companies that built products IBM wants. Then IBM croaks off half the employees of the companies they buy, effectively killing off the innovation machine they just bought.
IBM executives are such morons – they actually expect US employees to implement Death March 2015 and to sacrifice their own jobs for the good of the company. This after IBM declared war on its US employees when they misused LEAN to dump employees.
Every quarter, you live in fear that you will be sacked – it is a terrible place to be sitting between an executive and his bonus.
Services executives continue to deny there are problems, meanwhile blaming US employees for the failures of their overseas counterparts. But the bean-counters are happy whenever the penalties for missing SLOs are less than the savings of using global resources. Net – the money counts, quality and adverse impact on the customer doesn’t.
IBM services clients would be well-advised to hire some IBM services business castoffs – we know where and how IBM works (or more aptly said doesn’t work). We know where the dead bodies are.
Last, as an IBM vet with 30+ years of service, I can say that IBM is now one of the worst companies to work for in the US and is doomed to fail. The heart and soul of the company is mortally wounded – it is too late to change course to recover.
The question is not whether IBM will fail, it’s a matter of when and how precipitous the failure will be.
First of all thanks Bob for the articles, as a sales person in IBM for 11 years now in CEE I can agree with most of what was said up to now.
Off shoring does not happen only in US, happens everywhere, at the end I believe penguins will be trained to do process designed automated tasks helped by Watson for a handful of fish, but that is life in this materialistic greed driven western civilization.
In my opinion the main problem with IBM and with almost all the western corporations is lack of vision and mission to impact the society they exist in and pure focus on shareholder value driven by unrealistic Wall street expectations.
It is hard to accept that a 400000 emp company’s only goal of existence is a EPS of 20$/share.
Most of the companies made their name when they had a creative drive and built either excellent products or services that had an impact on people lifes.
These days is just about repackaging the last years model in a new wrap and trying to sell it with a markup.
Is this a progress to be called success? I believe not.
I listen every quarter how good IBM has done in the region while the macro and micro economic factors are showing a decline and slowdown in the economy, so we must be magical or not ?
When you skin it down usually it comes to HW performance in Russia that with 5-10 deals a year makes the growth necessary for the region to be “successful” the rest is double digit decline.
Could it be different ?
Sure it could but then a one shoe fits all global company strategy would mean nothing, it is better to tweak reports and say all is rosy in the land of OZ and hope it lasts for 2-3 more quarters.
The worst thing in CEE for IBM is Exec/management in-shoring, from South America, Australia, UK and US.
They come with huge packages (salary, family costs, relocation cost etc) and attack a market they honestly do not understand, you can just imagine the “Space Balls” approach, ” We will teach you how to do things the right way”.
And then the Incompetence Olympics start for a year or two before a new coaching team arrives and starts the new games.
I always wished they could stay longer, regardless of the cost, like 5 years so they can taste their medicine in the last 3 years of their contracts after spending 2 year screwing things up.
But it does not happen.
And not to say that for the value of a single contract for them you could hire 10-15 people locally to actually give the level of service and expertise that our customers expect and deserve for the premium they are off loading to IBM.
It is a bit different from what is happening in US but in my opinion same crap different package, it stincks !
IBM is not growing revenue, it is reducing cost (in a strange way, because cuts necessary cost and builds unnecessary cost) how long can this last?
I believe the 2015 road-map will be met but the patient might die after the procedure.
When customers tell me why they chose IBM over the course of the years was because of excellent products, good local skill availability for support and the ethics approach IBM had in doing business.
But from their mouths, almost all of that is gone now, what remains is the customer rape every month end to make the numbers regardless of the consequences.
Customer used to be King, now is a sheep ready to slaughter, IBM execs could care less about the consequences certain actions have on the customers, the only important thing is the monthly close and quarterly close,there is nothing else.
If you have a different opinion your are fired, if you are a mid manager and do not suck up you are fired, if you do all you can to protect the interests of the customer and IBM you are fired because it did not close when management wanted.
Life is cheap in these parts of the world it seems, but it has a price, the best people are either gone or leaving, thinking of it as well.
I certainly lost any ambition to advance in such an environment.
” Arbeit macht Frei” could stand as moto for them with all negative connotations.
The respect for each individual has lost any value in this structure and IBM is becoming ” The Borg”.
“Resistance is futile, you will be assimilated!”
The customer always gets ripped off – I’ve seen software engineers buying a $3 drink paying a minimum $30 card charge in a bar – on expenses.
Really? When I was traveling for IBM doing consulting work, the per-day meal allowance would not have bought two drinks at that rate in any city. McDonalds seemed to be the expected lunch.
(Another example of cost cutting going too far – not covering reasonable expenses.)
Don’t confuse engineers with sales critters – I have no idea how those guys do it.
What is all this nonsense about shareholder value? Since when do the top brass at big companies care about shareholder value? Since never, probably. Let’s call a spade a spade. Shareholder value is just a code word for “Is my stock option worth more this quarter?”
None of the top dogs want to reveal how truly greedy they are, so they spin this nonsense about shareholder value. As if they care in the slightest how happy their shareholders are. Of course, if things really went to pot and there was the possibility of officers or board members being replaced… But again, its not the happiness of shareholders they care about. It’s all about their personal lust for money and power.
If they (the top dogs) could find a way to keep their money and power without having to keep the shareholders happy, it would be lights out for shareholders.
If life were fair, companies wouldn’t place shareholder value at the top of their list of priorities. No, it would be satisfying customers first, making an honest profit next, then treating employees fairly, and on down to all the other stakeholders. (Just my opinion, of course.) Satisfied customers, not happy shareholders, are the key to company survival. Let’s get real, kiddies.
When companies go bankrupt, is it due to unhappy shareholders? No, it’s because they ran out of money. Which situation in turn is likely due to not being able to satisfy their customers — their main source of sustainable money.
Charles,
Actually the shareholder value thing started up in US business school in the late 60’s. At that time the academics said that companies had their priorities wrong and their only responsibility was to the shareholder. Up to this point it was generally thought that a company was responsible to shareholders, customers, society and employees (not necessarily in that order) and needed to balance one against the other. Out of this came the so called need to align executives to the needs of the shareholders and the excessive use of stock options is born. Voila greed takes over.
Of course the part that got lost in all of this is if you balance the needs of the customer and to a lesser degree society and employees your are taking care of the shareholders. By having satisfied customers you keep them and grow your business. Help society and you get good will and positive perceptions that again help to grow business. Satisfied employees tend to produce better results which takes us back to satisfied customers. Grow the business and the shareholders see an increase in value (either dividends or stock price). But this is a long term plan not quarter to quarter.
Corporations ceased caring about the public good the minute Delaware started incorporating them freely and for an indefinite time. That was in the 19th century.
It was clarified in the late 20th century, that boards of directors could think about something other than shareholder value if they really wanted, and that wouldn’t be illegal under corporations laws. In other words, they were not obligated to provide only shareholder value. Boards almost universally ignored this clarificiation.
Corporations are sociopathic by definition– they aren’t human and consequently they are at odds with human society. The Supreme Court, starting in the late 19th century, began to endow these legal constructs with the rights of natural persons. The decision that started it all was almost comically inept, and most likely corrupt. Once the ball got rolling, it was impossible to stop. To the point today that corporations now have all the rights and privileges of natural persons, without any of the limitations or constraints that mortal humans are subjected to.
Once you animate the Frankenstein monster, you necessarily lose control of it. A sociopathic entity attracts sociopaths– and even worse, psychopaths. The absurd power that corporations have today have drawn human psychopaths and sociopaths into their management structures, where they thrive.
We have sowed the wind, and are reaping the whirlwind. Until the corporate legal form is put back into its cage– as it was before the War Between The States– we are doomed.
+1
You’ve got to be kidding me. Shareholder value is the purpose of all publicly traded companies. The only travesty is that managers have long ago abandoned this idea as quaint in order to enrich themselves at the expense of everyone else. But then again, no one seems to mind.
Gee whiz, Gavin. I’m not aware of any law or regulation that requires a corporation to increase the market price of their shares — thus producing the magical “shareholder value.” Of course, a publically traded corporation has certain responsibilities to their shareholders, as enforced by the SEC. However, darned if I can find any requirement to provide shareholders with an increased stock price.
I think this nonsense about shareholder value is just some hopeful expectation in the minds of some investors. It probably has as much certitude as all the bogus promises that politicians make to be elected.
As far as being a requirement of publically listed corporations? I don’t think so.
Technically you’re right: http://hbr.org/2010/04/the-myth-of-shareholder-capitalism/ar/1
However, as that article makes clear the law can say whatever it wants, but the myth is stronger than the law.
As to the purpose of a publically traded corporation, I thought that was to raise money from the shareholders to start or expand the corporation’s business. (And of course to reward the founders and financial backers.)
In doing so, I suppose some stock promoters might dangle the possibility of the shareholders making a profit from their investment. But guaranteed shareholder value, no way.
Again in theory this is correct. However, in practice corporations have become the looting grounds of psychopathic CEOs.
It can happen. Think about the airline industry. Think about car industry.
Think about Amdahl, Apollo, AST, Atari, Burroughs, Commodore, Compaq, Data General. Digital, GE, Honeywell, Mitsubishi, Nokia, Remington Rand, Sinclair, Sperry, SUN, Tandy…
What’s NeXT?
And why exactly should we care if a business fails?
There is a difference between a business failing, and a business being looted and actively driven into he ground.
The mafia calls it a “bust-out”. When you get your business model from organized crime, that’s a problem.
IBM is not just a services company. None of these suggestions will do anything in fixing the problems in the product and software divisions.
In your part three you brought up failed IBM strategies as a problem. Most of what I saw were failed software projects. In at least one of the strategies, OnDemand, I know that IBM had existing products that customers were generally satisfied with. What the customers were looking for were ways to modernize the way these programs were accessed by the end user. The rank and file development folks were saying it was better for the customer and IBM financially to improve the existing product. Instead we “stabilized” them and forced the OnDemand solutions on to them. As there were competitive products to IBM’s a number of customers switched. Their rationale was we have to do the work to move to IBM OnDemand anyway so what does it matter if we look somewhere else to fill our needs. When a customer left management did not care.
The problem here is how to fix the development management process. In many cases IBM technical folks are aligned with the customer technical needs however IBM management is off in left field. The result is failed products and a loss of customers. However to IBM management, always trying to chase the next big thing, these are not failures just obsolete technologies to be discarded. This same thing occurs to companies IBM buys. As they get more integrated into IBM, the less responsive they become until one day they too become obsolete technology. This churn is unsustainable as there are too many competitors in today’s world that the customer can turn to.
To fix this issue will require a change of culture. While I don’t believe you have to be an automotive engineer to run GM you have to love and understand cars. Likewise to run IBM I don’t feel you have to be a software or hardware engineer but you better love and know how to use computer. To this end I would require management come from technical backgrounds at least at the levels that determine product development and marketing. I would require more direct contact between the customer technical staff, IBM development staff and IBM product marketing staff. This will eliminate the “phone game” that always takes place in the current IBM structure. Last I would reduce the number of executives involved in the product development structure. During the point in my career where my division president was 4 levels above me I was able to reduce my development cycles. Most of this was due to decisions being made in a timely fashion instead of a bunch of mid-levels arguing over turf and what colors the foil presentation should use.
Question- Can you outsource outsourcing? I may just form a new business!
Well, maybe it is not the most appropriate but have a laugh.
https://www.theonion.com/video/more-american-workers-outsourcing-own-jobs-oversea,14329/
I realized a crucial detail about Bob’s excellent list as he wrote it, and many posters, pro and con, assume that such a list would have be digged up by a good many consultants once the request is passed along to them. WOW, The client wants to know ALL OF THIS???? And many post it would take days and weeks to dig up this data. Which is true. IF and only IF you DO NOT HAVE IT in the first place??? If you are a bona-fide Disaster Recovery professional, then this data is ALREADY in your hands, compiled and saved over time and periodically updated every few months or so. YOU DO NOT have to build the proverbial wheel to get it!!! Any responsible tech has the data already on the shelf. Any responsible DR consultant revises the data periodically because of business and tech changes so that WHEN the Day of Reckonning does come, restoration is a known procedure and can be efficiently done.
AND YET everyone is acting like this is NEW. OMG, this list is BASIC STUFF folks, should be on a bookshelf in a manual of complete systems inventory. Ready for usage as needed.
I write from experience, again, having survivied September 11, 2001 with my servers literally hitting the street from 103 floors up in the South Tower. If YOU do not have these facts at your hands in whatever environment you are in, they YOU LOSE, GOOD DAY SIR.
Disney, Texas, AstraZeneca all have said that to IBM.
Study your business continuity and DR plans folks. IBM doesn’t care.
Unless something has changed since I left IBM three years ago, everything on that list was always easy to produce with the exception of number 7 which is dumb and not usually part of the SLA. The notion of continuous improvement is the same nonsensical concept that put the US economy where it is now and therefore led IBM down the same path. Economists like to call it ‘growth’ and if your company sells a billion widgets per year at $10 per widget and it only costs them 1 cent to make the widget if they don’t sell more than a billion widgets the next year they are not ‘growing’ and wall street tanks their stock.
If you really think demanding this list from your PE/DPE will make their knees knock with fear you are sadly mistaken and it makes me doubt everything else you have said about IBM in these articles.
IBM does make a lot of money from the service business but the statement that the outsourcing of 70%+ of their employees to offshore is merely to get more profitable is to misunderstand the real agenda. Global Services is on the auction block. As soon as the numbers match up to what some Indian company wants it will be sold.
By 2020 IBM will only be made of management, sales and the research centers which generate the highest concentration of revenue for the company because they don’t have to bulk manufacture anything, just invent it and license the patents to everyone else.
If you want to change the way IBM works then you have to do it as a consumer. Don’t buy products that license their technology from IBM. Good luck with that because there are few alternatives.
Why are there few alternatives? No one can make them?
Why I’m Ashamed to be an ‘IBMer’
I’m ashamed because IBM places profit ahead of all other considerations.
I’m ashamed because IBM executives are arogant and place accolades above employees’ livelihoods
I’m ashamed because IBM skirts laws to avoid exposing their actions to the public
I’m ashamed because IBM lacks patriotism
I’m ashamed because IBM has lost its integerty internally and soon will loose its integrity publicly
I’m ashamed because IBM is where I work, but that will change soon.
You are ashamed but you still take a paycheck from them? Hypocrisy is what that is called.
He said he’s leaving. Save your criticism for the people who aren’t ashamed.
I know plenty of IBM employees and they all say the same thing ‘what a terrible company, i am going to quit.’ and they never do.
Until he does leave he’s one of them and part of the problem.
So the minute he leaves he will be allowed to speak out, but before that the reasons because of which he leaves are his personal fault?
That’s a logical fallacy.
Read this: https://en.wikipedia.org/wiki/False_dilemma.
Dude, he’s looking for another job! Not exactly the easiest thing to do in this economy. Give him a break.
Given what you’ve said about IBM in previous posts, why do you care? Why would anyone care? Can’t they fend for themselves?
You have a prominent instrument company with the following business problem:
1. You currently market a very successful product with no real competitors.
2. It is 25 years old and in need of technology upgrades, to say the least.
3. Several components in the product are end-of-life, you bought all the is left.
4. If you do nothing the product dies in 2 years.
5. It cost you $20K to build and its selling price is $90K and you sell 10,000/yr.
6. 20-40 Man/Years of effort (no one is sure) went into the original
7. You might be able to replace it on time if you devote $20 to $40 Mil.
8. Budget to replace is more like $2.5 Mil
9. Much of your expertise is either retired, inexperienced or more likely outsourced.
10. Though this is the most severe case, you have other products share the same fate.
11. Your parent company drives your police of cost control, outsourcing, etc.
Just posting this so IBM won’t feel alone in its death spiral.
There are large holding companies that believe in milking the whole herd to extinction.
Oh and be sure to ask for evidence that all the software running on your devices is licensed, That one will be funny!
This series of columns has been accurate to my observations and experience. It’s stunning to me that after 13 years with IBM working on services, I’ve never once spoken to a salesman or contract negotiator enquiring if what they wanted to offer (promise!) the customer was do-able. They make their deals, take their bonuses and leave us to deliver the bad news.
Is IBM not innovative?
It was granted more patents than MS, HP, Oracle, EMC & Google combined in 2010, with 5,896. In 2011 it was awarded 6180 patents. One of the key reasons fort his lead is that IBM consistently spends about 6% of sales on R&D versus e.g Apple’s 2.2%. Where does Apple sit? Number 46 with 563 patents…
So, yes, IBM is highly innovative and thus is the dominant US engine of highly skilled labor
And yes, IBM off shores, but off shoring is a cut throat business, hence your second article is probably correct to a large extend.
But how is that different from apple’s model, it designs in California, but all its products are put together in China? In relative terms it off shores various degrees more than IBM, and it does so for the very same reasons, ample available, ‘unskilled’ cheap labor… or, you could call it slave labor?
Where and why does IBM off shore and does it matter?
It offshores in delivery of ERP projects, in response to price pressure from the highly standardized SAP & Oracle Corporate IT software choke. Off shoring is done for software integration, testing and maintenance. This is a price sensitive market, hence all the big SIs have to resort to off shoring to be competitive. And with that, do we strangle the development of highly skilled labor? No, the highly skilled labor will set the requirements, off shoring is merely the delivery mechanism. Just like Apples ‘designed in California model, assembled in China’ model
Bob, please get over your IBM aversion and blind admiration for Apple. They are variants of one and the same model called profit maximization.
The interesting question is how corporate IT will get rid of the ERP Oracle/SAP choke.
Alas most IBM patents are indeed junk. In IBM Research and parts of SWG, there are roaming patent attorneys who routinely ask what ya got, and then they take idea forward, write it up, and you get a check (a tinier check all of the time). These attorneys know how to file patents that have a chance, but often don’t understand the technology. Pretty sad combination. Make friends with one of these guys, and you can become a ‘master inventor’. If you are on the WRONG division — GBS, GBS AS, CIO — you pretty much get no help in getting your patent filed. You get 5 mins to pitch your idea to a committee and if you don’t know the lingo, forget it. It is really really hard on your own. If you get past the initial hurdles, a tech ignorant outside attorney will help you write it up — badly. The IBM patent system is too easy for the select few, and way too damn hard for the vast majority. End result is there are a lot of successful, but totally craptastic patents written by the professional patent machine and the rest with so little guidance and help it is laughable.
IBMers — got a great patent idea? Take it to your next employer.
Outsourcing — IBM fires first to meet headcount targets. Management doesn’t have a solid outsourcing plan most of the time. Many jobs can’t even be outsourced, so they hire them back as contractors. Since these people get no benefits, IBM still counts this as a big win. Quality is affected everywhere.
IBM is now working hard to eat the same poop they are selling other companies — SAP ERPs. Horrible, horrible software that only a CIO who has never seen it or used it can love. The mantra is out of the box, and use perpetual training since with this software you need to be taught where to click. Perpetual because of 40% attrition rate in India. You never stop training people— it is incredibly expensive but the cost is hidden in a different BUDGET. IBM pays way more overall but each exec gets to claim they met their numbers since not one of them needs to look at the big picture costs which should include the neverending costs of training, that they are spending more than ever overall.
Not only is quality poor, but often outsourcing drives the cost up because of the turnover — sometimes functions are implemented more than once because the new people didn’t even know if it had been implemrted once already, and because no one can use SAP’s Solution Manager, not even most of the SAP consultants.
In the last Resource Action, I have never seen more irreplaceable people canned. And no, they won’t be replaced, not really. Quality will continue to decline and it feels like some of the infrastructure is positively crumbling. IBM truly believes everybody except the execs are interchangeable cogs, that there is no so such thing as technical talent (only exec talent) and no such thing as a SME. The average IBMer has less than 5 years experience, and boy is it telling. Talent in the East just jumps ship to get bigger salaries, whereas in thr first world, talent is underappreciated and trapped by mortgages and college tuition, and have no choice but to wait for the end. Denial is our best friend.
IBM has replaced Respect for the Individual with a new motto:
“KNOW THE PRICE OF EVERYTHING, AND THE VALUE OF NOTHING”.
While it’s true that IBM files a lot of patents every year, many of those are “junk patents.” I have seen and read some of those, filed by my colleagues. My reaction to many was “You’re going to file a patent for this???”, and most of the time the reaction was, “Hey, it doesn’t cost me anything and it gets me some brownie points…”
Assuming that there is still plenty of technical talent left in IBM for ICT-Services, there are two options for them:
A) Leave together as an entire team, found your own company and take the customers with you.
Have a company constitution that includes at least the following terms:
Our company will never go public, as it only hurts our customers and employees and costs too much money in paperwork.
Every employee participates from the profit in the form of a fixed percentage of the profit being paid out to them.
Every executive has to continue to work in operation for some time of the week.
To sell your services to Customers, simply ask 3 basic questions:
Who pays IBMs management salaries and bonuses right now?
Is it more efficient to let 5 Indians work 20 minutes or let one American work 5 minutes to solve a problem?
How much time does slow or bad support cost your employees each day?
And of course, as a smaller private organisation you can keep the costs and therefore the prices will be competitive.
B) Immigrate into a German speaking country, where there is a large shortage of qualified personnel and there is little tolerance for slow or bad ICT-support and Indians can’t do the job due to the language barrier.
Although most of IBM stock is in the hands of a very few people, true for virtually the entire world stock market, I have seen some stockholder initiatives muster as much as 28% votes. Yet how many of us (not me) take our proxies and toss them. You have the chance to register a small voice against the Sam/Ginny/Randy plan to gut IBM of all its first world employees, customers be damned. When you vote your proxy statement, vote out the whole board and vote the opposite way the board recommends on every other item. I’ve done this for years and now my long-retired dad is doing it too.
I don’t quite get Bob’s plan for “fixing” IBM. If every customer were to present the list of questions he’s highlighted and demand quick answers, what would that actually achieve? (aside from causing a lot of pain and sleepless nights for a lot of technicians and service staff).
My guess, reading the tone of the article, is that the intention is that IBM would fail to be able to answer these questions promptly for most customers, who would then threaten to withdraw their business, and therefore IBM senior management would sit up and take note. But then what? Well, they could fail to do much and IBM would lose customers and lots of money. Or they could spend lots of money frantically re-hiring (probably in outsourced labour markets) to try and provide the data and keep the customers…and then what?
In short, I don’t understand what Bob’s concept of “fixing” IBM actually means. What is the desired end result of this, and how will it help? If I’m missing the obvious, apologies.
After thinking about it a few minutes, it seems clear it was the right thing to say in order to generate increased traffic to his site.
Having served in the trenches of multi-data center support as a DBA, data architect, SAN architect, line manager, project manager, solutions developer, you-name-it, supporting hundreds of products, thousands of customers, thousands of servers, approaching a petabyte of storage, I want to know one thing:
SHOW ME ONE EXAMPLE OF *** ANY VENDOR *** WHO CAN ANSWER THOSE QUESTIONS AFTER ASSUMING SUPPORT OF A LARGE-SCALE, HETEROGENEOUS, LEGACY DATA CENTER.
Can’t be done.
I’ve no sympathy for IBM, none, but I’m telling you from experience that those questions can’t be answered without a a massively expensive effort that no business (that I know of) is willing to pay for.
Unless, of course, you implement everything correctly from the very beginning, with physical & logical element tracking built into the full life-cycle process. And if you’re doing that, you don’t need IBM or EDS or whatever Big Vendor you bring in to pull yourself out of the mess that you’ve gotten yourself into.
Yet some businesses have done just that and saved money. Others tried and lost money. I would be curious to know what worked and why.
IBM is going to do what they want with their company.
I think the executives have spent too much time with the Wall Street Bankers and have picked up their bad habits. Charge the client everything you can; give ’em nothing back. Not coincidentally, that was the slogan from the pirate movie ( thanks Disney).
Where I live, there were 8 field service technicians twelve years ago. Now there are 2. Same customers, increased workload, increased overtime volume, as you can imagine, the demands are hellish. The lucky ones were the ones who went early and found their way to other careers. God bless them all.
I could care less if tomorrow is my last day at this place. And all of my customers know it….
IBM CEO Ginni Rometty says that culture is a company’s #1 asset. The question is whether she is out of touch or whether she is just a blatant liar? I suppose that anyone who achieves such business success is not a good person, so I am guessing the latter.
Two things: first, I used to be a contractor for a large electronics manufacturer that also has a hosting division where IBM was parking some of their overflow customers. This is actually pretty common, as IBM has very little of their own available datacenter space. If a customer were to hand this query to IBM, there is no way they could get an answer back in 24 hours. The service delivery manager would need to contact the ‘off-shore’ admin team who would then have to contact our team. We would have to ask the monitoring team to run a report. Too heavily siloed to be able to do it ourselves. Until I got there they didn’t even have a working hardware monitoring console and no way to know what patch level was on any particular machine. Second, I now work for an IaaS division of one of the large Indian outsourcing companies. One of our big moneymakers is migrating customers onto our shared mainframe infrastructure. Customers are abandoning the endless cycle of maintenance contracts and software upgrades (with IBM) and having us do it for them. We can host multiple customers on a larger Z series and the customer gets to pull the plug on the big iron. This is helping to eat away at IBM GS and at their mainframe services revenue.
Point is, IBM GS has been having problems with customer satisfaction for years. Ask American Express, among many others. Couple that with the erosion of their hardware business, and you’re absolutely right, IBM is looking like one big cooked goose. They got Compaq (and then HP) and Dell to follow along in their footsteps, too. No wonder why both those companies have also been stumbling.
IBM can produce all of the items in your report for any SO account nearly immediately. What’s more, they are certainty no worse than EDS (actually better than EDS), CSC, ACS, Accenture, etc. The standards are equally as bad across all of the outsourcing companies. The entire outsourcing to BRIC model is busted and will increasingly be broken as energy and labor rates go up.
IBM needs to figure this out.
Er, maybe it’s just me but FOUR articles over three days (128-20th April for the actual ‘articles’) is hardly a LONG series of articles.
Three were just bitching about the company and it’s plans. One was a half-assed attempt to over simplify a complex problem by addressing ONE aspect of ONE function that the whole company does in order to make the author look ‘clever’.
I’ve still not seen anything to backup the original claims about 78% workforce reduction in the US by 2015 (there’s no way IBM would sneak that past ANY government body) since that’s around 3000 US employees PER MONTH they would have to let go (based on Alliance estimates of current US workforce size). That’s gonna be one HELL of a restructuring!
This has been little more than sensationalist journalism aimed at whipping up the readership into a frenzy. When I want this sort of rubbish I can pick up a copy of the National Enquirer or go to the News of the World (UK tabloid) or any number of equally useless ‘news’ sources.
Are the problems in IBM? Sure there are.
Could it be better place to work? Sure it could (but it could actually also be worse too).
Will it change? Unlikely.
Will this story have ‘any’ effect? Ha ha…!
I had thought that Cringely stood for something better that this sort of useless diatribe. Obviously I was wrong.
78% Reduction in US Workforce is a mis-statement. IBM’s 2015 Goals includes the goal that US Employees will only account for 20% of the total worldwide workforce. Numbers available (such as those provided by IBM Alliance) show the current Worldwide headcount at 416,000 and the US head count at 96,000. In order to get to 20%, IBM needs to let go 10-12,000 US Employees by 2015.
IBM has 1 to 2 Resource Actions (layoffs) each year. That’s about 5 more RA’s till 2015. All they need to do is let go 2500 per RA and they will meet their target.
[…] Part 4: How to fix IBM in a week […]
We’re a very long term IBM customer. The US reduction of workforce will be the last nail in the coffin for IBM’s business at our company, many other nails having been driven by both IBM’s issues and the relative advantages of other companies in the same business as IBM. Loyalty still means something to our company– to our employees and to our locales around the globe and to where we were founded and have operated for more than a hundred years– and companies like IBM that persue stock price increases without being at least somewhat loyal to their communities, employees and customers (ie service levels) are businesses that we tend to eliminate here.
Sadly, good riddance given all of this.
Sounds like a company I’d like to work for. Let’s talk about insourcing or at least some help managing your next provider. I’m available……
Bob, you are sooo…. close!!!!! I think at some level these questions are going to challenge some IBM service delivery teams on some account. Many of the accounts I have worked on had this information readily available. This is a good thing because many clients today could not do this type of reporting at all.
You see, IBM has been working on addressing these types of gaps over the last decade; and to a degree some steps backward occurred as “the more and highly skilled resources” outside the USA left these type of capabilities in the closet while they focused on keeping production environments running properly. How about that “highly skilled employee” who faked being a mainframe system administrator for several months before being caught. Sorry, I digress.
What I was hoping you were going to say was for clients to request and demand IBM employee surveys be performed and published to the very clients being supported by these personnel. I have seen this happen and IBM’s initial response was to *not* share the surveys; knowing full well they were obligated per their contract to do so. Needless to say, the results were shared and did not satisfy the client. IBM was told to do more to recognize and motivate their employees. This client had the right idea. Customers, shareholder and employees need a balanced management approach to sustain long-term growth and prosperity for both parites. Today, I can unequivocally say Shareholders are #1, Customers are #2 and Employees are a distant #3 as you can possibly get. I am not bitter or vindictive. I don’t need to be. The facts are here and they are black-and-white. Fortunately for me, IBM is doing a great job supplying these facts. Disney, State of Texas, etc….. SMART COMPANIES!!!! Interview them please!!! Again, sorry…. I digress.
The only employees that seem to love IBM was the “highly skilled employees outside the USA” and “those that say they are happy just because they believe they need this job at IBM”. I have not run into an IBM employee Band 10 or below that hasn’t a story about how the greater IBM executives with employment contracts and lucrative salaries have screwed them over one way or another to the point where they have become experts in dealing with internal adversity moreso than satisfying the client. The brand is tarnishing from the inside and it is beginning to show. You see, the CEO has a list of troubled accounts and those tend to get all of the focus everyone above and below shares in the blame. I have seen instances where IBM has determined a solution was UNDERLIVERABLE per our standard risk management approaches and went ahead with the deal anyway. You can only imagine what the employees had to do just to survive being an IBM employee servicing a client that simply expected IBM to deliver what they promised they would deliver; and performed enough spin doctoring to survive. Then!!!! Only to be told we got a below average rating because the account was not profitable. HUH?!?!?! REALLY!?!?!?!
In closing, surveys, surveys, surveys…. Clients should see them and demand IBM to be transparent and explain how this statement is wrong…. Shareholders are #1, Customers are #2 and Employees are a distant #3.
Correction: executives are #1, everyone else is a distant #2, and employees will someday be replaced with slaves.
I liked the first three articles. This one is a dud.
About 80% of that information can be retrieved through the Systems Director Inventory Manager. If you have an ISDIM report and a backup tape, I have enough to replicate your system.
Another 15% can be collected by your Premium Service tech in a matter of hours. They have the reports generated daily.
The last 5% makes no sense. Why in the world would IBM care about your purchase date or asset value? Why would you ask for it? Doesn’t the IRS require you to keep that information?
Data collection is the only thing outside of hardware and software that has really improved for IBM in the last few years. If you aren’t sending in ISDIM reports automatically or have a Premium Service tech, both of which are damn close to free compared to the cost of the computer, then either you’re a really cheap bastard or you don’t want IBM to have this information.
Is there a link to the first three parts?
Yes.
I’ve read all the articles and most of the comments, and what everyone seems to have forgotten (including Armonk) is that IBM took billions of dollars from the 2009 stimulus package, in the name of creating and keeping jobs in the US. That “Stimulus” was meant to stimulate the US economy, not the salivary glands of IBM executives drooling over the “free” money. In fact, Palmisano helped Obama decide how to build that package and distribute the funds. Did they spend all those dollars so quickly that their obligation to the taxpayers has been fulfilled? Did they actually create or keep any real jobs in the US?
To any of you Americans that posted any kind of comment defending Big Blue, you might want to rethink that. Wake up and pay attention! Realize that your hard earned tax dollars have contributed to thousands of US workers moving from gainful employment to the government dole, while those US tax payer dollars are going to boost and support dozens of overseas economies, including (ironically enough) China, from whom our government borrowed the money in the first place.
It’s not only shameful, it’s crooked and downright slimy.
I have read a lot these former/current IBMers complaining about how no one was able to provide ‘x’ or do ‘y’.
memo: YOU are the one supposed to provide ‘x’ or do ‘y’ for someone else within the company — think they might be complaining about you?
It’s sure sounds odd that all the smart, competent ones are all right here.
Heroes fight to the end. you were unwilling to give it your all to change the company within and left.
“the company” still consists of some of your colleagues and friends who are still there, working hard to do what you don’t want to.
shameful
.
Bob, I’m thinking this really means large companies that require these services, should pick up the expertise that IBM, and many other companies are shedding – because from my vantage point, they aren’t getting rid of the duds.
If a company were to reverse the trend, and accumulate that experience and know-how, they would go on to be a powerhouse in competition with others who view technical people as interchangeable widgets.
order mooncake…
[…]I, Cringely » Blog Archive How to fix IBM in a week – Cringely on technology[…]…
Earlier this week, IBM significantly updated IBM Fix Central with improvements to make this worldwide one-stop site for updates for all IBM products even more effective and useful for our clients.
So one of IBM’s client was furious over the delay and worst quality of the deliverable, a far cry from what was promised, “an e-commerce portal based on Websphere for an electronic product manufacturer”. Greedy Account and Project Managers took the entire responsiblity of developing the portal including the images and the coding.
The e-mail said “It looks like the portal was made by inexperienced Indian newbies who tried their hand at portal development after a quick tutorial overnight in HTML. Nothing works as desired on the pages, broken links, exception errors is what one gets.
Now coming to the images, I can see them horribly resized from the high resolution product photos we sent them. I can see artefacts in the images, which makes me wonder if the Indian developers work on 256 color monitors. Overall the site looks awful.
With this project going to be a debacle with them, its better we head to a local agency with efficient senior developers, before the billable hours increase further causing a loss to us.
Continued…The client staff actually flew to India to find out what was going on. They were shocked to see young developers both male and females chit-chatting on weekdays and then working weekends to meet the impossible deadline set by them.
Just check out IBM Software Labs (ISL) at Hadapsar, Pune, India which is a place in the midst of garbage piles and animal waste. 😛
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